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The Honolulu Advertiser

Posted on: Sunday, May 8, 2005

EDITORIAL
A tale of progress, missed opportunities

Given a strong economy and the absence of any short-term crisis that had to be dealt with, the 2005 Legislature missed an opportunity to show true long-term leadership in tackling the tough issues that will face our state over the next 25 years and beyond.

Those issues include building a sustainable economic climate, developing and giving a first-class education to tomorrow's workforce, confronting the realities of an aging population, and balancing the long-term competing pressures of development and environmental protection. While some good work was accomplished, much of it had a distinctly short-term time horizon.

For instance, in times of booming economic growth, it's right that policy-makers consider taking some of the gains enjoyed by the "haves" to share with the "have-nots."

The 2005 Hawai'i Legislature will be remembered as one that understood that lesson, but honored it only partially, at best.

To a degree, the Legislature's inability to deal more forcefully with long-term issues of social equity was due to circumstances out of its hands.

This primarily focuses on sweeping and relatively expensive pay raises for public workers that the Legislature funded this session.

The price tag on pay raises for the unions is out of lawmakers' hands. The Legislature's only decision is whether to fund the raises or not.

Missed opportunities

It's a shame the pay hikes were not accompanied by long-overdue civil service reforms that would make our public workers more efficient and better able to cope with 21st-century conditions and challenges. Also missing was a concerted effort to deal with long-term underfunded pension obligations that these raises will only drive higher.

After the raises were approved, lawmakers had two choices: put off any reform for another day, or, raise taxes.

On balance, they made the right choice. They raised taxes slightly on high-end real estate transactions (to pay for some affordable housing and support purchase of endangered or valuable "Legacy Lands") and they opened the door for a substantial excise (sales) tax on everyone to pay for public transit.

The boost in taxes on real estate sales was logically tied to the issues created by soaring demand for Hawai'i real estate and the pressures of new development.

The county-option half-percentage-point hike in the 4 percent excise tax is a more difficult issue. For starters, one must say lawmakers had the guts to take on an issue (transit) and do something about it.

And make no mistake: Despite what you might hear on the campaign trail next year, the 2005 Legislature did vote to raises taxes.

If one believes, as we do, that the counties — particularly Honolulu — have a dire need to do something about traffic and congestion, and that the solution will cost big bucks, then the Legislature did the right thing.

What was missing was any effort to ease the impact of this regressive 12.5 percent tax hike on those who will be hit hardest, folks on the lower end of the income ladder.

At the beginning of the session, there was brave talk of giving relief to these Islanders through raising the standard deduction, making overdue adjustments to relax pressure cause by bracket creep or by writing a robust earned income tax credit into the law.

In the end, nothing.

No reforms

In other areas, the session failed to deal with long-overdue changes that would reform our campaign financing laws.

And there was a dramatic lack of action on business reforms that would help sustain our economy over the long term. While Hawai'i is enjoying a fair measure of prosperity today, a sustainable economy demands true action in areas such as worker's compensation, health insurance and quality workforce development.

And while there was sincere recognition of the pressing problem of long-term care for the elderly and the need for universal preschool education, what we got in the end was recognition, not action.

So let's say the 2005 session was a work in progress. Some steps were taken to boost the inventory of affordable housing and provide transportation alternatives for folks squeezed by the cost and hassle of driving.

Next year, let's put into place pocketbook relief for the people we expect to live in that housing and ride that transit. And let's give them substantive business and economic reform to produce quality jobs and sustainable long-term economic growth.